UMB Financial, headquartered in Kansas City, Missouri, will become the first bank to offer custody and distribution services when it inks an acquistion deal with Sunstone Financial Group. Sunstone is a fund-services provider geared at startup funds.

The value of the deal was not disclosed but Sunstone will continue operating with its current corporate identy, brand, and Milwaukee offices, under the leadership of Mim Allison, chief executive officer.

The parties explained that the deal is being done to create a complete backoffice-services provider with a minimal overlap. The firms' officials expect the strategic acquisition to position UMB with a complete product lineup, especially as service providers consolidate, and to secure Sunstone the wherewithal to compete against major fund providers.

Allison detailed the history of the alliance by explaining, "We've had a long-standing alliance where we've referred clients to each other, and there was the belief that we could do more together than we could do apart."

UMB will move its own backoffice business to Sunstone after the deal is finalized, immediately becoming Sunstone's fourth largest customer. The firms' expectation is that the merger will generate significant revenue for UMB almost immediately, because Sunstone is already profitable.

"We hope they'll continue to make money... We'll add some marketing support, but we won't largely change anything they're doing" said R. Crosby Kemper III, chairman and CEO of UMB.

As a rule, the acquisition will be inconsequential to staffing because the only product overlap occurs in fund accounting. This department will be moved to Milwaukee, and the UMB's existing department will be absorbed into other areas. There are no intentions to change any part of the Sunstone management team.

Kemper summarized the merger to the MutualFundWire as "a big, great relationship that we've talked about for years."  

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